Federal Issues Update
June 29, 2017
On Tuesday, June 27, the House Transportation & Infrastructure (T&I) Committee approved legislation (HR 2997) that would provide a long-term reauthorization of the Federal Aviation Administration (FAA). The bill – entitled the 21st Century Aviation Innovation, Reform, and Reauthorization Act (AIRR ACT) – was cleared on a 32-25 vote after a marathon markup session during which the committee approved roughly 80 amendments. While certain aspects of the six-year legislation have garnered bipartisan support, the markup featured a lively debate over GOP committee leaders’ controversial plan to transfer air traffic control operations from the FAA to a nonprofit corporation.
HR 2997 would authorize increases in funding for several key local aviation programs, including the Airport Improvement Program (AIP) – growing from $3.35 billion in fiscal year 2017 to over $3.8 billion by fiscal year 2023. The bill also would provide a significant funding boost for the Essential Air Services (EAS) program, while keeping funding for the Small Community Air Service Development Program (SCASDP) at current levels.
Of particular interest to California’s self-help counties, Representative Alan Lowenthal (D-CA) offered an amendment during the committee’s consideration of the bill that would clarify that local sales tax measures of general application are not subject to provisions of federal law that require the proceeds of certain taxes to be spent for aviation purposes. The amendment was strongly supported by CSAC, as well as other state and local interests in California.
As anticipated, the chairman of the committee, Representative Bill Shuster (R-PA), expressed his opposition to the amendment on the basis that it would allow aviation-related tax revenues to be diverted for off-airport uses. The chairman also noted the opposition of the airlines, airports, general aviation, and other aviation stakeholders. Chairman Shuster did acknowledge that there are unique circumstances regarding the application of local voter-approved sales taxes and offered to work with Representative Lowenthal on compromise language if the congressman withdrew the amendment. Mr. Lowenthal agreed to the chairman’s request and will be working with CSAC and other interested parties on a potential solution.
It should be noted that the impetus for the Lowenthal amendment is a 2014 FAA ruling that requires States and local governments to spend the proceeds of any aviation-related tax – those derived from excise taxes and local sales taxes – on airport uses only. The FAA’s ruling amounts to a reinterpretation of a particular section of federal law that addresses how the proceeds of aviation fuel taxes are to be spent. Incidentally, the Conference Report to the law in question (PL 100-223) states that the requirement is “intended to apply to local fuel taxes only, and not to other taxes imposed by local governments, or to state taxes.”
It is estimated that the FAA’s policy reinterpretation will mean a loss of over $100 million for the State of California and its local governments. Nationwide, a recent study suggests that state and local governments will lose roughly $190 million a year under the FAA rule change. Furthermore, because sales taxes on aviation fuel are not segregated from other taxable sources, state and local governments will need to implement an extensive new tracking system(s) in order to comply with the FAA’s policy.
Across Capitol Hill, the Senate Commerce, Science, and Transportation Committee marked up its own FAA reauthorization measure on June 29. The legislation (S 1405), which would provide a four-year renewal of federal aviation programs, includes an increase in authorized funding for both the AIP and SCASDP. Under the bill, funding for the EAS program would be frozen at current levels. Notably, the Senate legislation does not include a proposal to privatize the nation’s air traffic control system.
Programmatic authority for the FAA is currently operating under a one-year extension, which is set to expire on September 30, 2017.
On June 29, the House of Representatives was expected to pass controversial legislation (HR 3003) that would cut off certain federal grant funds to states and localities that do not cooperate with federal immigration authorities. The bill, introduced by the chairman of the House Judiciary Committee, Representative Bob Goodlatte (R-VA), takes its provisions from a comprehensive immigration enforcement package (HR 2431) that was approved by the Judiciary Committee last month.
Under HR 3003, jurisdictions that fail to comply with provisions of the bill designed to compel cooperation with federal law enforcement entities would be ineligible to receive funding from the following federal grant programs: State Criminal Alien Assistance Program (SCAAP); Community Oriented Policing Services (COPS); Byrne Justice Assistance Grant (JAG); and, “any other grant administered by the Department of Justice or Department of Homeland Security that is substantially related to law enforcement, terrorism, national security, immigration, or naturalization.” While current law (8 USC Section 1373) forbids state and local governments from restricting the intergovernmental exchange of information regarding an individual’s citizenship or immigration status, HR 3003 would vastly expand this authority by expressly prohibiting states and localities from barring their officials from complying with federal immigration laws or from assisting or cooperating with federal law enforcement entities.
It should be noted that the legislation includes language that would “clarify” ICE detainer authority. Under the bill, the secretary of the Department of Homeland Security would be authorized to issue a detainer to state/local law enforcement if the secretary has probable cause to believe the individual in question is an inadmissible or deportable alien. The statutory probable cause language is something that has not been included in iterations of similar legislation and represents a new approach to modifying federal immigration law to ensure that jurisdictions honor ICE detainers.
The bill also would protect jurisdictions that comply with ICE detainers from the threat of lawsuits. Federal courts have ruled that detainers – which are civil holds and not criminal warrants – violate the Fourth Amendment and open local governments to civil liability.
Looking ahead, HR 3003 faces an uphill climb in the Senate. In previous sessions of Congress, Senate Democrats have blocked the consideration of similar bills.
This week, House appropriators released and approved at the subcommittee level four fiscal year 2018 spending bills: Commerce-Justice-Science (CJS), Energy-Water Development, Agriculture, and Financial Services. In addition, the full committee on June 29 advanced two additional bills to fund Department of Defense programs, as well as the Legislative Branch.
On June 29, the House CJS Appropriations Subcommittee approved its draft spending bill for fiscal-year 2018. The bill would provide $54 in total discretionary funding to the Departments of Commerce and Justice, NASA, and related agencies. The proposed investment would be $2.6 billion less than the fiscal year 2017 enacted level and $4.8 billion above the president’s budget request for these programs.
With regard to funding for state and local law enforcement assistance, the House bill would provide nearly $1.12 billion in fiscal year 2018 – a level that is roughly $140 million below current spending. Of the aforementioned total, $220 million would be provided for the State Criminal Alien Assistance Program (SCAAP), an increase of $10 million. In addition, the CJS bill would increase funding by over $102 million for core Byrne-Justice Assistance Grants (Byrne/JAG). It also would eliminate funding for the COPS hiring grant program. However, the legislation does provide $65 million for initiatives to improve police-community relations and an additional $45 million for the Comprehensive School Safety Initiative.
On June 29, the House Energy and Water Development Appropriations Subcommittee approved its draft fiscal year 2018 spending legislation. The bill, which funds the Department of Energy (DOE), the U.S. Army Corps of Engineers, the Bureau of Reclamation, and several independent agencies, was cleared on a voice vote.
All told, the measure proposes to spend $37.56 billion, or $209 million below the fiscal year 2017 enacted level and $3.65 billion above the president’s budget request. While Army Corps programs would see an increase of $120 million, funding for the Bureau of Reclamation would be reduced by $79 million. Energy programs would sustain the largest overall cut in funding, decreasing from a level of $11.3 billion this year to $9.6 billion in fiscal year 2018. The proposal would also slash funding for DOE’s energy efficiency and renewable energy program.
The House bill also includes several policy riders, including language authorizing the administrator of the Environmental Protection Agency (EPA) and the Secretary of the Army to withdraw the Waters of the United States (WOTUS) rule. It also would prohibit federal funding from being used to require a permit for the discharge of dredged or fill material under the Clean Water Act.
In a related development, the Trump administration on June 27 formally began the process to repeal the WOTUS rule. The next step will involve rewriting the regulation, which EPA Administrator Scott Pruitt has signaled could be completed by the end of the year. In the meantime, federal officials will return to enforcing a guidance document from 2008 when deciding whether a waterway is subject to federal oversight. For his part, President Trump has ordered the EPA and the Corps to craft the new rule with input from state and local governments.
On June 28, the House Appropriations Committee’s Agriculture Subcommittee advanced its spending bill for fiscal year 2018. In total, the measure would provide $20 billion in discretionary spending for the Food and Drug Administration (FDA), nutrition programs, as well as rural development programs and services, among other things. While the bill is $876 million lower than current funding levels, it is $4.6 billion more than the president’s budget request.
On June 27, the House Committee on Natural Resources completed its markup of legislation – the Resilient Federal Forests Act (HR 2936) – that aims to increase timber production and reduce the risk of wildfires on National Forest System lands largely by streamlining the environmental review process for certain projects. The legislation also would establish a procedure for requesting a wildfire disaster declaration on federal lands. While HR 2936 proposes to limit judicial review of forestry projects, the measure does not include some of the more severe restrictions that were in a previous iteration of the bill.
With regard to the Secure Rural Schools (SRS) program, the measure would expand eligibility under Title III to include law enforcement patrols, training, and equipment purchases as eligible expenses. This would help rural counties dedicate critically needed resources to combat illegal marijuana grows on forest lands. However, it should be noted that SRS is currently expired, and without an extension, this provision would be of minimal value.
Prior to the markup, CSAC sent a letter to the Natural Resources Committee expressing support for a number of the streamlining provisions included in HR 2936. With regard to fire budget borrowing, the correspondence urges committee leaders to adopt the funding structure found in the Wildfire Disaster Funding Act (HR 2862), which would allow agencies to manage emergency wildfire suppression costs for “mega-fires” without impacting other priority programs. CSAC also has encouraged committee leaders to work in a bipartisan manner to ensure that the environmental review process can be completed in a timely and cost-effective manner, without compromising the protection of the natural environment. As the bill moves through the legislative process, CSAC will be working with the California delegation, as well as other key members of the House and Senate, to improve federal land management practices.
This week, the Department of the Interior announced that it will begin distributing fiscal year 2017 funding to eligible counties under the Payment-in-Lieu-of-Taxes (PILT) program. In all, 57 California counties will receive nearly $48.3 million this year, up from $47.3 million in fiscal year 2016. It should be noted that California counties have typically been the highest recipients of PILT funding. By comparison, Utah receives the next highest PILT allocation amounting to just over $39.5 million. Individual California county funding amounts can be accessed here.
While the future of the PILT program remains uncertain, CSAC continues to urge members of the California congressional delegation to make the program a top budgetary priority.